Charities aid our economies, communities and lives
TheRecord.com – opinion/story – Re: Peter Shawn Taylor in his June 13 column (What should governments do when charities plead poverty?)
June 21, 2013. Christine Rier
According to Peter Shawn Taylor in his June 13 column (What should governments do when charities plead poverty?), Kitchener-Waterloo MP Peter Braid’s first-time donor’s super credit to encourage Canadians to make their first charitable donation is indicative of “lazy charities” expecting governments to bail them out.
In fact, the new tax policy has very little to do with charities relying on government to solve their challenges, and a whole lot more to do with charities trying to become viable and sustainable organizations.
While Statistics Canada found an annual increase in charitable donations reported by taxpayers in 2011, it also concluded that this slight increase came despite a decline in the number of donors. In other words, fewer people are giving more.
Shifting demographics will only compound this trend, fuelling charities’ very valid concern that the status quo is not sustainable.
In addition to demographic trends, charities are also coping with a higher demand for services and reduced government funding. During the mid-20th-century, governments started funding charities as part of the Canadian social safety net. But then in the 1970s, they began clawing back the funding attached to these services.
This trend, exacerbated by recent recessions, continues today.
How can charities fill this funding gap? Increased efficiencies and cuts only get you so far; at some point you have to secure enough revenue to provide services. While new funding models are emerging that combine the best of business and charity, for now, charities are increasingly reliant on fundraising.
Far from being disinterested in dealing with donors, charities recognize the need to engage Canadians, but are often ill-equipped to fundraise. As part of their reduced commitment, governments replaced core funding with short-term project funding that no longer paid for overhead or staffing. This short-sighted approach gutted the organizational capacity of many charities, especially small to medium ones.
As a result, these charities lack the necessary personnel, infrastructure and resources to successfully fundraise, and above all, they lack the time to develop long-term partnerships, time to grow supportive networks, and as Ken Stern, the former chief executive officer of National Public Radio in the U.S., convinces Taylor, time to identify the needs, build internal capacity and measure outcomes … just like businesses.
And yet, as local high-tech leader Tim Jackson recently pointed out, we don’t encourage or support innovation and growth in charities to the same extent as we do in business.
While some may be of the opinion that a bonus tax credit will have little impact, previous taxation policy, specifically the elimination of the capital tax gains on donations, has had a very positive effect on charitable giving, resulting in more than $1 billion of donations of shares each year since 2006.
Similarly, we applaud government for “investing” or “giving incentives to maintain and create jobs” when providing tax breaks and support to the corporate sector.
In contrast, Taylor describes tax incentives for charitable giving as “putting charities on the dole.” However, the charitable and non-profit sector in Canada not only provides a significant amount of our health, educational, arts and cultural, and environmental services and programs, it also contributes an average of 7.8 per cent of total Canadian Gross Domestic Product, which is more than the retail trade industry and close to the value of the mining, oil and gas extraction industry.
That’s two million jobs, plus goods and services.
It’s time we all recognized that charities bring value to our economies, communities and lives. The first-time donor’s super credit is one way to enable charities to connect with critical donor support.
But more importantly, what we need to remember is that whether it is taxes or charitable donations, it’s Canadians’ money we are talking about, and surely they have a right to choose how to invest it.
Ask yourself: Where do you think your hard-earned money is more effectively invested, Ottawa or charities?
Christine Rier, of Cambridge, has been involved in the local charitable sector for more than 20 years.
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